Operating Mechanism is a fancy term for processes (and the corresponding tools) used to run an organization. Examples of operating mechanisms are:

The quarterly talent review process

The developer interview process

Weekly product review

The growth-board / project-funding process

These are necessary to help the business do its work effectively. Each operating mechanism has its own purpose (which should be clear to those involved – but sometimes isn’t).

After participating in running, changing and building a variety of operating mechanisms, I wanted to share my observations. These are some inconvenient truths according to me:

1. Non-compliance is real

People ignore emails and instructions. Things that are too complicated don’t get done. People go on vacation. Higher priority items crowd out lower priority items.

I’ve seen people design operating mechanisms without understanding the need to be simple / fast / valuable. People don’t comply well with mandates – especially if they don’t understand the why of it.

Also, people are forgetful. If you put an operating mechanism in place that requires people to remember something (e.g. “please remember to tag these 3 random people in every ticket that affects some subgroup”) it will not happen.

And so you need to think about how the operating mechanism handles non-compliance. Does the whole thing fall apart if someone doesn’t do their part? Or is it more resilient – does it simply degrade? Interview accuracy degrades if you have to cancel an interview. Approval chains grind to a halt if there isn’t a way to delegate or escalate.

2. Operating mechanisms operate within constraints

Almost every step in an operating mechanism operates under a time or people constraint. We are always doing the best we can within the limits. It could always be better if we gave it more. E.g. more peer-feedback during reviews, more time during calibrations, another phone screen before an onsite, more time to discuss in loupe, etc.

Building an operating mechanism means using judgement about the diminishing returns from doing more.

3. You can’t A/B test an operating mechanism

When discussing an operating mechanism, someone at Indeed will inevitably propose that we A/B test it. Usually accompanied by a wink 😉

You can’t A/B test an operating mechanism, because you can’t do random assignment and/or get enough power and/or align on metrics. The closest you can do is have different groups pilot or try different approaches, then compare. Most often you evaluate and improve operating mechanisms by cycles of feedback, assessment/judgement, modification. There are business studies that you can read about, but it can be hard to know if they are really valid, and if they apply to your particular circumstance. But studies can often inform various adjustments to try.

4. There will always be problems and complaints

“It has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time” — Churchill

Operating mechanisms don’t get much love. The best they can hope for is some respect. But there is no such thing as perfection – where nobody complains.

To keep things efficient and fruitful, if you are discussing operating mechanisms, keep complaining to a minimum and stick to discussing concrete proposals for change. Keep it real. Abstract discussions are rarely helpful.

5. Organizations outgrow their current operating mechanisms regularly

What got you here won’t get you there. Things change.

There will always be a sense that things are broken. This is no excuse for not fixing things. It’s an explanation for those who are surprised that at fast growing companies like Indeed the operating mechanisms aren’t running perfectly smooth. That’s because circumstances have and continue to change rapidly. It can be hard to get ahead of exponential growth.

So what should you do about these?

Here are tips for working with operating mechanisms:

Start with why. Clearly and repeatedly articulate the purpose of the operating mechanism, whenever you first create it, and when people are proposing changes.

Remind everyone of the context. Operating mechanisms are temporary, imperfect structures designed to accomplish goals in a changing environment. Feedback, discussion and iteration/change are necessary part of the process. Remind everyone regularly.

Organize around written proposals. Discussions around operating mechanisms can get abstract, unclear and wasteful. Try as best as possible to stick to gathering feedback, then discussing written proposals. To respect everyone’s time, focus on written proposals for change – there’s no point discussing a criticism if it isn’t accompanied with some suggested change.

1 Response to Inconvenient Truths about Operating Mechanisms

Yes to all of this. The only thing I’d add is remember the power of feedback loops. A closed loop system never gets any better. A system designed with a feedback loop or a virtuous cycle will continue to produce more and more value. Well designed operating mechanisms often have this characteristic.